Gold Funds Attract $10 Billion in September as Holdings Hit Record High

Gold exchange-traded funds attracted nearly $10 billion in inflows in September, bringing their holdings up by 67 tonnes to a record high of 4,256 tonnes, according to a report by the World Gold Council, at a time when the metal's price dropped.

Inflows into these funds reached a record $31 billion in the third quarter, with holdings increasing by 211 tonnes and assets under management rising by 9 percent, while total assets under management fell 7 percent month-on-month to $574 billion.

Europe posted a regional record with inflows of $14 billion, surpassing North America at $12 billion, while UK-listed funds achieved their strongest quarter in history with nearly $7.5 billion.

The World Gold Council believes that the combination of a decline of over 8 percent in the dollar-denominated gold price in September alongside inflows of more than 70 tonnes into funds is an unprecedented mix. It attributes this to a repositioning on the COMEX exchange, where managed money positions dropped by 84 tonnes and arbitrage positions fell by 156 tonnes. These figures reflect a shift in the composition of demand, as institutional investors through funds have become a counterweight to futures speculators.

What do these terms mean?

Exchange-Traded Fund (ETF): An investment fund traded on an exchange like stocks that tracks the price of a commodity such as gold, allowing you to buy shares instead of holding physical metal.

Assets Under Management: The total market value of the assets that an investment fund or institution manages on behalf of investors.

COMEX: The commodity exchange in New York where gold and silver futures are traded and speculator positions are priced.